In the past, the U.S. healthcare system mostly used fee-for-service (FFS) payment models. Providers were paid based on how many services or procedures they gave. This caused high costs and did not always improve patient health or satisfaction. Over time, the Centers for Medicare & Medicaid Services (CMS) saw the need to change to a system that rewards quality and good care, not just quantity.
Value-Based Purchasing programs are part of CMS’s plan to improve care quality and cut unneeded spending. These programs link hospital payments to how well they do on different quality measures, including patient experience. This fits with CMS’s goals of providing better care, improving health for more people, and lowering healthcare costs.
The Hospital Value-Based Purchasing (VBP) Program changes Medicare payments for about 3,000 acute care hospitals across the country. Payments depend on how hospitals perform in several areas. The payments are calculated through the Inpatient Prospective Payment System (IPPS). At first, 2% of participating hospitals’ Medicare payments are held back. These funds are then shared as bonuses to hospitals that show good performance or improvement on quality measures.
Hospitals are scored in four main areas:
Patient experience is an important part of the VBP program because it shows how patients feel about the care they get. This affects loyalty, reputation, and money outcomes.
Patient experience is measured using the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey. CMS made this tool with the Agency for Healthcare Research and Quality (AHRQ). The HCAHPS survey has 29 questions about communication with nurses and doctors, how quick staff respond, cleanliness and quietness, communication about medicines, discharge instructions, overall hospital rating, and whether the patient would recommend the hospital.
The survey goes to a random group of adult patients between 48 hours and six weeks after they leave the hospital. It is done by mail, phone, or interactive voice response (IVR) in many languages. The results are shared with the public on CMS’s Care Compare website. This allows patients, caregivers, and doctors to see the hospital’s performance.
Research from Deloitte shows hospitals with better patient experience scores do better financially. For example, hospitals rated “excellent” on HCAHPS had an average profit margin of 4.7%, while hospitals with “low” ratings had only 1.8%. Also, a 10 percentage point rise in top satisfaction ratings links to a 1.4% increase in profit margin and a 1.3% increase in return on assets (ROA). This shows hospitals have a clear money reason to improve patient experience.
The link between nurse-patient talks and hospital profits is especially strong. Good communication with nurses covers important parts of care that patients remember and use to judge their hospital stay.
Improving patient experience within the VBP rules requires handling some work challenges:
New technology, especially artificial intelligence (AI) and workflow automation, helps hospitals improve patient experience scores and meet VBP rules.
Front-office phone automation and smart answering systems help make patient communication easier. For example, Simbo AI uses an AI phone system that answers patient questions automatically, books appointments, and collects survey answers after discharge. These systems improve response, which is a key part of HCAHPS.
Patients get quicker access to hospital services and clearer communication. Hospitals get better data for patient experience reports. Automated systems handle many calls well, cutting wait times and staff workload.
Interactive voice response (IVR) technology lets hospitals do HCAHPS surveys over the phone in many languages. It keeps patient privacy and improves response rates. AI analytics tools then process the data, find problem areas, and track progress.
Automated data collection helps hospital leaders get ready for CMS reports more easily and correctly. This ensures they submit on time, keep Medicare payments, and get the highest incentive payments.
Besides communication, workflow automation tools help care teams and staff coordinate discharge instructions, medicine information, and follow-up visits. When patients get and understand key information, hospitals can reduce readmissions and improve satisfaction scores.
Automation also helps meet quality and safety rules, which are part of value-based care programs.
For administrators, owners, and IT staff, Medicare’s VBP program needs a plan that balances rules, patient satisfaction, and money goals.
HCAHPS scores are shared publicly on CMS’s Care Compare website. This makes hospital performance clear to everyone. Public reporting pushes hospitals to improve because their reputation affects patient choices and referrals.
Hospitals with low patient experience scores risk losing patients and value-based bonuses. This shows why these scores matter beyond just Medicare payments.
Medicare’s Value-Based Purchasing programs shift the healthcare system toward rewarding good care and patient-focused results. Patient experience scores, shown by the HCAHPS survey, count for a large part of the performance score that affects hospital payments.
Better patient experience leads to improved care results and stronger financial outcomes. Hospitals with “excellent” ratings have higher profits and returns on assets.
Healthcare administrators, owners, and IT staff play an important role in using technology, training staff, and managing data to meet these changing payment models.
Companies like Simbo AI show how AI phone automation can help hospitals meet government rules and improve patient satisfaction. These tools cut down administrative work, improve communication, and help collect important patient experience data.
Using these technologies helps healthcare providers stay competitive and follow the rules in a system focused more on value-based care.
Research indicates that hospitals with better patient-reported experience perform better financially, with higher experience ratings associated with increased profitability.
Enhancing patient experience builds reputation and brand loyalty, leading to increased referrals and utilization of hospital services.
The Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) scores are widely tracked measures of patient experience.
Hospitals with excellent HCAHPS ratings showed an average net margin of 4.7%, compared to 1.8% for those with low ratings.
Nurse-patient engagement is the aspect of patient experience most closely associated with better financial outcomes for hospitals.
These programs financially reward hospitals for better patient-reported experience scores, influencing their focus on patient experience.
A highly engaged staff is likely to boost patient experience scores, translating into better hospital performance.
Higher patient experience scores are associated with increased revenue per adjusted patient day, indicating that investments in experience can lead to financial benefits.
Amid competing priorities, hospitals may question the tangible business value of collecting and acting on patient experience data.
Executives should consider investing in tools and technologies to better engage patients and enhance their experience, as this is linked to improved financial performance.
Simbo is using AI agents to automate all phone related workflows. Connect now to know more.
Schedule AI Agents Demo Now© Since 2019, Simbo AI.
